In this photo taken Jan. 18, 2011, a Morgan Stanley billboard is displayed in Times Square, New York. (AP Photo/Seth Wenig)

(Newser)
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In 2006, their best year ever, the 10 biggest US banks and brokerage firms made $104 billion in profits. By 2008, they had taken more than six times that amount—$669 billion—in emergency Federal Reserve loans. That amount, as well as amount loaned by the Fed to all its borrowers, remained secret until Bloomberg obtained the information via FOIA requests. The peak borrowing? On Dec. 5, 2008, banks and other companies had an outstanding balance of $1.2 trillion—which, Bloomberg notes, is about how much US homeowners now owe on delinquent and foreclosed mortgages.

Morgan Stanley borrowed the most, $107.3 billion; Citigroup got $99.5 billion; Bank of America took $91.4 billion. “These are all whopping numbers,” says a former Justice Department official. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.” But not just American finance: Nearly half of the top 30 borrowers were European firms; the Royal Bank of Scotland was the biggest of those borrowers, taking $84.5 billion. The $1.2 trillion was more than 25 times the previous Sept. 12, 2001, lending peak of $46 billion. Ultimately, according to the Fed, it suffered no losses and made $13 billion in interest and fees. Click for Bloomberg’s extensive report.

I don't begrudge the fed for taking extraordinary measures during an extraordinary financial collapse. We came very close to the edge. I recommend Andrew Ross Sorkin's book Too Big to Fail and/or the HBO movie based on it. Frontline has also done a good job. I would draw your attention to "Inside the Meltdown" and "The Warning" www.pbs.org/frontline/view

JackNelsonSteward

Aug 22, 2011 10:44 AM CDT

I wonder what percent of the nation's defaulted mortgages that much money would pay. I'll bet you it ... is ... LARGE. and where would that money have gone ... to the banks!!! It would have arrived as "mortgage payments" and much of what didn't arrive in such guise would arrive as "credit card payments," or "car payments." instead we basically GAVE the money directly to the banks. POURED money ... literally by the ton ... into institutions that had participated in the "business" that helped drag the entire economy over the cliff. I think they were supposed to be encouraged to lend it, but I don't think they did. I think they are still sitting, literally, on bails of cash. Now, I realize that it would have been just AWFUL to relieve all of those slacker homeowners of their justly borne debt. We also would have significantly altered the financial situation of the United States' citizens. Across the nation there would not be a keel-dragging monster inventory of foreclosed and short sale homes. The banks would have ended up with most of the money anyway. THAT would have been a STIMULUS !!